MSG Team's other articles

9559 How 5G Will Affect Businesses?

5G is the latest buzzword in the telecommunication sector. For a layman, it is difficult to understand what the buzz really is all about. Modern-day consumers have lived through the introduction of 3G and 4G. They believe that 5G will just be a minor enhancement over the way things are currently functioning now. However, that […]

12821 A Comparison of Healthcare Systems around the World

The Importance of Healthcare and Examples from around the World Health and Education are social sectors that need governmental support and funding. This is especially the case in developing countries where a vast majority of the people do not have the means to afford expensive and prohibitive medical care. This is the reason why many […]

10464 The New NAFTA Deal

Canada and Mexico are the second and third biggest trade allies for the United States. Historically these nations have had a healthy relationship with very few trade disputes. This is the reason why the North American Free Trade Agreement, i.e. the NAFTA was said to be successful. However, President Trump has been extremely critical of […]

9495 The Green New Deal

In the year 2019 the concept of “The Green New Deal” was introduced in American politics. The idea was floated by Alexandria Ocasia-Cortez and it became very popular amongst all Democrats. Almost all the Democrats who plan to run for President have come out in support of the Green New Deal. The idea has also […]

11816 What are Metrics and Why are they Important?

What are Metrics? Metrics are numbers that tell you important information about a process under question. They tell you accurate measurements about how the process is functioning and provide base for you to suggest improvements. It is said that only when one can express their understanding in terms of numbers is the understanding satisfactory and […]

Search with tags

  • No tags available.

The other modules discuss the phenomenon of globalization and the ongoing global economic crisis among other topics. This module is intended to discuss the salient aspects of the global economy including the structural features and the way in which several competing trends and factors influence the workings of the global economy.

For instance, the global economy is dominated by the United States, Europe and China in the current decade with the balance of power likely to shift towards China in the coming years.

Though the United States is in deep recession, there are many optimistic experts who aver that the country can pull through its worst recession since the Great Depression and reinvent itself and rejuvenate itself. Of course, Europe remains stuck in sovereign debt crises and deleveraging brought upon due to excessive debt and fiscal profligacy along with loose monetary policies.

On the other hand, China is undergoing a structural shift in the way its economy is ordered with more emphasis on domestic consumption driven growth instead of just relying on exports alone.

The present state of the global economy has meant that other emerging economies like India, South Africa and Brazil can hope to grow at moderately high levels if the current projections are anything to go by. However, what can upset the calculations of all these countries is the fact that for the last four years, most countries in the world have relied on loose money or in other words, printing money to stimulate growth. This leads to inflation in the absence of the real economy growing and hence, central bankers in most countries in the world are apprehensive about the effect of inflation. This is the primary agenda behind the tight monetary policy that has been followed in many countries including India.

However, the United States and China are nowhere near tightening their purse strings and on the other hand, they have embarked on a high stimulus driven growth which means that pretty soon they would have to deal with the problem of inflation.

Further, since the Dollar is the reserve currency and China has humungous reserves of Dollars, both these countries can afford to embark on stimulus since the rest of the world would continue to trade in Dollars which means that for the US, they can print as much as they can and for China they can use their reserves in any way that they deem fit.

One country that has managed the best of both worlds is Germany which because of its high productivity and export driven growth has managed to outperform nearly every other economy in the world.

However, the ongoing sovereign debt crisis in Europe has cast a shadow on Germany’s ability to finance the excesses of the other European countries. Hence, the situation needs to be keenly watched for the way in which Germany and the Eurozone would handle the crisis.

In conclusion, this article has given a thousand feet overview of the global economy. The subsequent articles discuss the many dimensions of the global economy and its workings in depth.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles